EDM Zone Limited Company accounts

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COMPANY REGISTRATION NUMBER: 08089410

EDM Zone Limited

Unaudited Financial Statements

31 May 2018

EDM Zone Limited

Financial Statements

Year ended 31 May 2018

Contents	Page

Officers and professional advisers	1

Director's report	2

Chartered accountant's report to the director on the preparation of the unaudited statutory financial statements	3

Statement of income and retained earnings	4

Statement of financial position	5

Notes to the financial statements	7

EDM Zone Limited

Officers and Professional Advisers

Director	Mr P Wilson

Registered office	Unit 10 Hawick Crescent
	Hawick Trading Estate
	Newcastle upon Tyne
	NE6 1AS

Accountants	Mitchells
	Chartered accountant
	Swallow House
	Parsons Road
	Washington
	Tyne and Wear
	NE37 1EZ

EDM Zone Limited

Director's Report

Year ended 31 May 2018

The director presents his report and the unaudited financial statements of the company for the year ended 31 May 2018 .

Principal activities

The principal activity of the company during the year was the provision of mechanical engineering services.

Director

The director who served the company during the year was as follows:

Mr P Wilson

Small company provisions

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

This report was approved by the board of directors on 16 October 2018 and signed on behalf of the board by:

Mr P Wilson
Director

Registered office:

Unit 10 Hawick Crescent

Hawick Trading Estate

Newcastle upon Tyne

NE6 1AS

EDM Zone Limited

Chartered Accountant's Report to the Director on the Preparation of the Unaudited Statutory Financial Statements of EDM Zone Limited

Year ended 31 May 2018

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of EDM Zone Limited for the year ended 31 May 2018, which comprise the statement of income and retained earnings, statement of financial position and the related notes from the company's accounting records and from information and explanations you have given us. As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at www.icaew.com/en/membership/regulations-standards-and-guidance. This report is made solely to the director of EDM Zone Limited in accordance with the terms of our engagement letter dated 30 November 2015. Our work has been undertaken solely to prepare for your approval the financial statements of EDM Zone Limited and state those matters that we have agreed to state to you in this report in accordance with ICAEW Technical Release 07/16 AAF as detailed at www.icaew.com/compilation. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than EDM Zone Limited and its director for our work or for this report.

It is your duty to ensure that EDM Zone Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and profit of EDM Zone Limited. You consider that EDM Zone Limited is exempt from the statutory audit requirement for the year. We have not been instructed to carry out an audit or a review of the financial statements of EDM Zone Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

Mitchells Chartered accountant

Swallow House Parsons Road Washington Tyne and Wear NE37 1EZ

16 October 2018

EDM Zone Limited

Statement of Income and Retained Earnings

Year ended 31 May 2018

	2018	2017
Note	£	£
Turnover	1,477,844	980,049

Cost of sales	768,743	484,121
	------------	---------
Gross profit	709,101	495,928

Administrative expenses	453,318	305,763
	---------	---------
Operating profit	255,783	190,165

Interest payable and similar expenses		–	2,144
		---------	---------
Profit before taxation	5	255,783	188,021

Tax on profit	( 3,264)	15,214
	---------	---------
Profit for the financial year and total comprehensive income	259,047	172,807
	---------	---------

Dividends paid and payable	( 82,400)	( 57,500)

Retained earnings at the start of the year	952,363	837,056
	------------	---------
Retained earnings at the end of the year	1,129,010	952,363
	------------	---------

All the activities of the company are from continuing operations.

EDM Zone Limited

Statement of Financial Position

31 May 2018

	2018		2017
Note	£	£	£

Fixed assets

Intangible assets	6	200,000	250,000
Tangible assets	7	551,086	456,461
		---------	---------
		751,086	706,461

Current assets

Stocks		35,815	35,815
Debtors	8	341,940	214,208
Cash at bank and in hand		258,380	236,134
		---------	---------
		636,135	486,157

Creditors: amounts falling due within one year	9	195,083		173,863
		---------		---------
Net current assets			441,052	312,294
			------------	------------
Total assets less current liabilities			1,192,138	1,018,755

Provisions

Taxation including deferred tax	63,028	66,292
	------------	------------
Net assets	1,129,110	952,463
	------------	------------

Capital and reserves

Called up share capital	100	100
Profit and loss account	1,129,010	952,363
	------------	---------
Shareholders funds	1,129,110	952,463
	------------	---------

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

For the year ending 31 May 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Director's responsibilities:

- The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476 ;

- The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements .

EDM Zone Limited

Statement of Financial Position (continued)

31 May 2018

These financial statements were approved by the board of directors and authorised for issue on 16 October 2018 , and are signed on behalf of the board by:

Mr P Wilson
Director

Company registration number: 08089410

EDM Zone Limited

Notes to the Financial Statements

Year ended 31 May 2018

1. General information

The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Unit 10 Hawick Crescent, Hawick Trading Estate, Newcastle upon Tyne, NE6 1AS.

2. Statement of compliance

These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.

Income tax

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

	Goodwill	-	10% straight line

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Leasehold Improvements	-	33% straight line
Plant & Machinery	-	10% straight line
Motor Vehicles	-	25% straight line
Equipment	-	33% straight line

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.

Finance leases and hire purchase contracts

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

4. Employee numbers

The average number of persons employed by the company during the year amounted to 19 (2017: 14 ).

5. Profit before taxation

Profit before taxation is stated after charging:

	2018	2017
	£	£
Amortisation of intangible assets	50,000	49,999
Depreciation of tangible assets	76,115	62,483
	--------	--------

6. Intangible assets

	Goodwill
	£
Cost
At 1 June 2017 and 31 May 2018	500,000
	---------
Amortisation
At 1 June 2017	250,000
Charge for the year	50,000
	---------
At 31 May 2018	300,000
	---------
Carrying amount
At 31 May 2018	200,000
	---------
At 31 May 2017	250,000
	---------

7. Tangible assets

	Land and buildings	Plant and machinery	Motor vehicles	Equipment	Total
	£	£	£	£	£
Cost
At 1 June 2017	6,180	651,157	5,550	15,317	678,204
Additions	–	168,590	–	2,150	170,740
	-------	---------	-------	--------	---------
At 31 May 2018	6,180	819,747	5,550	17,467	848,944
	-------	---------	-------	--------	---------
Depreciation
At 1 June 2017	6,085	200,213	2,544	12,901	221,743
Charge for the year	95	73,088	1,387	1,545	76,115
	-------	---------	-------	--------	---------
At 31 May 2018	6,180	273,301	3,931	14,446	297,858
	-------	---------	-------	--------	---------
Carrying amount
At 31 May 2018	–	546,446	1,619	3,021	551,086
	-------	---------	-------	--------	---------
At 31 May 2017	95	450,944	3,006	2,416	456,461
	-------	---------	-------	--------	---------

8. Debtors

	2018	2017
	£	£
Trade debtors	321,136	199,595
Other debtors	20,804	14,613
	---------	---------
	341,940	214,208
	---------	---------

9. Creditors: amounts falling due within one year

	2018	2017
	£	£
Trade creditors	114,603	137,346
Social security and other taxes	59,720	28,789
Other creditors	20,760	7,728
	---------	---------
	195,083	173,863
	---------	---------

10. Director's advances, credits and guarantees

Included in Other creditors is an directors loan account balance of £9,754 (2017:£257).

11. Related party transactions

The company was under the control of Mr P Wilson throughout the current and previous year. Mr P Wilson is the managing director and majority shareholder. No transactions with related parties were undertaken such as are required to be disclosed under FRS102.